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Pay Ericsson Rs 453 crore or face 3-month jail: SC to Anil Ambani

Anil Ambani addressing Reliance capital annual general meeting at Birla Matoshri on Tuesday. Express photo by Prashant Nadkar, Mumbai, 21/07/2009

New Delhi:The Supreme Court Wednesday held Reliance Communications (RCom) Chairman Anil Ambani guilty of contempt of court for not honouring the undertaking given to the court to pay Rs 550 crores to Swedish telecom firm Ericsson.

A bench of Justices R F Nariman and Vineet Saran asked the Ambani to pay Rs 453 crores to Ericsson within 4 weeks failing which he will have to undergo imprisonment for three months.


This is in addition to the Rs 118 crores already deposited by the contemnors with the SC Registry. This court directed its Registry to pay this money to Ericsson in one week’s time. The bench said the undertakings given by the three Reliance co’s to pay, showed that they had “no intention” to honour it within the 120 days given by the court or the extended time allotted.

The undertakings were “false” to the knowledge of the companies and this itself affects the administration of justice and amounts to contempt of court, the bench ruled.

The apex court said the “unconditional apology” offered to it ought to be rejected and that the undertaking showed the “cavalier attitude of the despondent”.

The court also asked the three Reliance companies to pay fine of Rs 1 crore each failing which Anil Ambani and the two other Directors will have to undergo jail term of one month each.

Ericsson has approached the apex court seeking contempt action against the RCom chief and the two Directors for allegedly not honouring their word to pay the Rs 550 crores.

In his defence, RCom contended that the amount was to be raised from the sale of assets of its telecom network could not be paid as the expected amount could not be raised.

Senior advocate Dushyant Dave, representing Ericsson India in the case, had earlier invoked the Rafale deal to target Ambani during the contempt hearing.

“They have money for Rafale. Somebody who is getting involved in every conceivable project has no money to pay Rs 550 crore to us and honour this Court’s order”, the Counsel told the bench.

Senior advocate Mukul Rohatgi, representing Anil Ambani, sought to counter this and said the undertaking was conditional upon the sale of RCom assets to Jio. “To say that Anil Ambani gave a personal undertaking and that it was unconditional is a traversing of justice … It was conditional”, Rohatgi said.

Rohatgi told the bench that the sale which was expected to net Rs 18,100 crore brought in only Rs 780 crore. Dave submitted that this money from the sale was given to the Department of Telecommunications instead of Ericsson. Rohatgi replied that lenders had done this to keep the telecom licence alive as without that, there would be nothing.

There was also controversy over the bench’s order that sought Ambani’s personal appearance during the contempt proceeding. The Chief Justice of India Ranjan Gogoi sacked of two Supreme Court employees for tampering with the apex court order.

The incident which led to the development dates to January 7 when the apex court bench directed Anil Ambani’s personal presence on the contempt plea by Swedish telecom group Ericsson.

However, the order uploaded on the court’s official website said “personal appearance of the alleged contemnor(s) is dispensed with”, indicating that Ambani would not have to appear in court on the next day of hearing.

This was subsequently “revised” and a new document was uploaded. It said “personal appearance of the alleged contemnor(s) is not dispensed with”. The digital signature on the order shows it was uploaded on January 9.